SAB rides out 'perfect storm' in UK

Sab MillerA British thirst for Italian lager has helped the world's second biggest brewer to grow UK beer sales amid a "perfect storm" hitting the market.

SAB Miller increased UK sales volumes by 5% in the half-year to September 30, driven by a strong performance from its Peroni Nastro Azzuro brand.

The wider group, which also owns Grolsch and Coors, posted a 12% hike in underlying profits to 2.76 billion US dollars (£1.7 billion) in the first half.

The UK sales lift came after an extra 800 licensed premises installed Peroni draughts over the last year, meaning 6% of pubs, hotels and restaurants across the UK now sell the brand.

But UK managing director Gary Haigh said the UK performance was a bright spot in an otherwise challenging environment for the beer industry.

He said the Government's planned 2% above inflation beer duty increase next year would knock the industry as it struggles to recover from a tough summer when beer sales were hit by record wet weather, an early exit from the Euro 2012 football tournament and an exodus from London during the Olympics.

He said: "If you put all this together you have got an almost perfect storm."

The group's 11.8 billion US dollar (£7.4 million) acquisition of the Australian lager Fosters contributed significantly to a 10% underlying increase in profits to 506 million US dollars (£317 million) in its Asia-Pacific business.

Its performance in emerging markets such as Latin America, where underlying profits grew 14% to 920 million US dollars (£577 million), also helped drive growth. But higher raw material costs and increased levels of marketing spend contributed to a 5% slide in European underlying profit to 516 million US dollars (£323 million).

Eddy Hargreaves, analyst at Canaccord Genuity, said the group's European performance was not as bad as feared. SAB shares jumped 7% after the half-year figures.
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